Government pledges 'biggest expansion of homeownership since the 1980s
Here's what you need to know about the Prime Minister's plans to increase the availability of 95% mortgages.
The Prime Minister has promised to help more people get onto the housing ladder through increasing the availability of mortgages for those with small deposits.
In his address to the virtual Conservative Party conference, Boris Johnson said millions of people who could afford a mortgage were prevented from getting onto the property ladder because they could not save the necessary deposit.
In a bid to turn “generation rent into generation buy”, he announced plans for a new scheme to give more people the chance to take out long-term fixed rate mortgages for up to 95% of their home’s value.
On a £200,000 property, this would mean borrowing £190,000 and saving £10,000 to use as a deposit.
Johnson said the government believed it would enable an additional two million people to become homeowners, representing the biggest expansion of homeownership since the 1980s.
Why has Johnson announced the scheme?
The government has already launched a number of initiatives to help more people get onto the property ladder.
But the issue of homeownership has been made more urgent by the coronavirus pandemic and its associated lockdowns.
In the past, 95% mortgages have been widely available, but the majority have been withdrawn by lenders since the pandemic struck.
Addressing the conference, Johnson said millions of people, who were often young, were locked down in rented accommodation which lacked privacy, outside space or an appropriate place in which to work.
He added that while some people were happy to live in a rented home, the majority of people aspired to buy their own place but were prevented from doing so by the need to save a large deposit.
How could it work?
Johnson did not give any further details at the conference about how the scheme would work, or when it would be introduced.
However, if the government is to tempt lenders back into offering small deposit mortgages, it may have to act as a guarantor.
The size of deposit borrowers have is only one part of the equation lenders look at when deciding how much to lend.
They also consider how affordable monthly repayments are once borrowers’ other outgoings are taken into account, both now and if interest rates rise.
And Johnson has suggested in a recent newspaper interview that the government may look at ways for these stress tests to be removed.
Where can first-time buyers turn for help now?
The government already offers a number of schemes to help first-time buyers get onto the property ladder.
Under the Help to Buy equity loan scheme, people can purchase a new-build home with just a 5% deposit, with the government topping this up with a 20% equity loan that is interest-free for five years.
The scheme is currently available to all buyers, but it is due to be relaunched in April 2021 for first-time buyers only.
Other help includes the First Homes scheme, which enables first-time buyers and key workers in England to purchase a new-build home at a 30% discount, and shared ownership, which enables people to purchase a share in a property and pay rent on the part they do not own.
Those aged under 40 who are saving for a deposit can use the Lifetime ISA, under which the government contributes up to £1,000 a year to savers who set aside £4,000 annually towards the purchase of a new home or retirement.
First-time buyers have also benefited from a stamp duty exemption on homes costing up to £300,000, although the chancellor recently announced a stamp duty holiday for all buyers on homes costing up to £500,000 until 31 March 2021.
Top takeaways
- The Prime Minister has promised to increase the availability of mortgages for buyers with small deposits
- The government believes it will enable an additional two million people to buy a property
- Johnson said it would represent the biggest expansion of homeownership since the 1980s
Property rich list 2020: Britain’s most expensive streets revealed
Discover the top 10 priciest streets in London and outside the capital, from Kensington Palace Gardens to Montrose Gardens.
The 10 most expensive streets in Britain can all be found in London, with Kensington Palace Gardens crowned the priciest UK road for the 12th consecutive year.
Houses on the tree-lined avenue cost an average of £35.9m, according to our latest research on the most expensive streets in Britain.
Outside of the capital, the South-east of England dominates, with eight out of the top 10 priciest streets outside of London located in Surrey.
Gráinne Gilmore, Head of Research at Zoopla comments: “Our data shows where housing stock and prime locations converge to create some of the most expensive addresses in the UK. Clusters of expensive homes are not unusual as the cachet of an area starts to create an appeal of its own, which can factor into what a home is really worth.
“London dominates the country's prime property market, but it is being challenged by the South East in terms of the number of million-pound streets, reflecting the rise in demand and pricing seen in this market, as well as its housing stock mix and its geographical size.”
The 10 most expensive streets in London
Kensington Palace Gardens has been the most-expensive street for the past 12 years.
Houses on the gated street dotted with embassies, diplomatic residences and the homes of ultra high net worth individuals will set you back nearly £36m on average.
It is notably adjacent to Kensington Palace, where the Duke and Duchess of Cambridge have an apartment, and the street is home to steel tycoon Lakshmi Mittal and Chelsea football club owner Roman Abramovich.
Our research found that Courtenay Avenue in Highgate, north London was the second-most-expensive street for the second year running, with homes worth £18.6m on average.
There are three new additions to the top 10 this year, in a list that is dominated by addresses in the London Borough of Kensington and Chelsea.
Chelsea’s Mulberry Walk comes in eighth place and has an average asking price of £9.6m. While St Albans Grove in Kensington, appears in ninth place, and has an average property value of £9.5m.
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South-east dominates outside London
Outside of the capital, Surrey takes the crown with eight out of the top 10 priciest streets.
Montrose Gardens, in Leatherhead, is home to the heftiest price tags, with average property values of over £6m.
In second place is Titlarks Hill in Ascot, Berkshire, with an average property value of £5.9m.
Streets in Virginia Water, Surrey - which became the UK’s first “million-pound town” several years ago - feature on the list, taking third place (Virginia Water, average £5.8m), fifth place (North Drive, average £5.24m) and seventh place (Woodlands Road East, average £5m).
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Million-pound streets by region
Regional analysis of the data shows there are now 12,545 streets in the UK with an average property price of £1m - and increase of 30% since 2015.
Of these, 4,707 are found in the South-east of England and 4,523 are in London.
Only 27 can be found in Wales, 57 are in the North-east of England, and 114 in Scotland.
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Priciest streets in the largest counties
The most expensive streets in Britain’s largest counties (calculated by population) have also been revealed.
Montrose Gardens again tops this list, but in second place is Philippines Shaw in the Kent Downs with an average property price of £4.2m.
Dock Lane in Brockenhurst is Hampshire’s most expensive street, with an average property value of £2.4m, and is in third place.
Next on the list is Theydon Road in Epping, Essex - a sought after location due to its countryside feel and proximity to London, with an average property value of £2.4m.
In fifth place is The Avenue in Altrincham in Cheshire, with an average property value of £2.29m. It is Greater Manchester’s most expensive street and known to be popular among Premier League footballers.